Buy-to-let must surely be one of the financial success stories of our times.
Just think about this. Prior to 1996 there were no buy-to-let mortgages. According to the Halifax, the number of buy-to-let mortgages jumped from 275,000 at the end of 2002 to 408,300 by the end of 2003. By the end of 2005 there were 701,950 and now as I write it’s estimated that there are 1.44m buy to let mortgages.
In the meantime the proportion of private rented accommodation has also increased.
According to the latest census (2011) the proportion of UK households renting has increased from 31% to 36% over the last 10 years. This includes social renters (council tenants and housing association tenants) but overall the proportion of social renters is falling meaning most of this increase will be in the private rented sector.
Putting these two trends together, buy-to-let should continue to flourish over the next few years. Providing care is taken to purchase the right property in the right area, this should provide a fantastic opportunity for private investors.
The chances are that if you are thinking of investing in residential property, you will, at some stage, take out a buy-to-let mortgage.
Let’s start by having a look at how buy-to-let has developed and why it is such an exciting opportunity.
